Calculate Net Working Capital Turnover Given the Following Data

question 320

Multiple Choice

Calculate net working capital turnover given the following data. Total fixed assets $200,000; long-term liabilities $55,000; total liabilities $80,000; total shareholders' equity $220,000; total sales $800,000.

• A) 13.75
• B) 12.67
• C) 11.75
• D) 10.67
• E) 9.67

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Definitions:

Incremental Borrowing Rate

The incremental borrowing rate is the interest rate a company would have to pay if it borrows additional funds.

Major Overhaul

Significant restorations or renovations to an asset, often extending its life or improving its efficiency.

Non-Cancelable

A contract or policy clause that safeguards against cancellation before a specified date, ensuring a degree of stability or guarantee.

Service Life

The estimated period during which an asset is expected to be usable for its intended purpose, affecting depreciation calculations.